Lombardi Publishing was originally established in 1986 as an investment newsletter publisher offering stock market advice to its readers. Today, we publish 25 paid-for investment letters most of which provide stock market advice. Profit Confidential is our daily free e-letter that goes to all our Lombardi Financial customers and to any investor who wishes to opt-in in to receive it. Written by Lombardi Financial editors who have been offering stock market advice for year to Lombardi customers, Profit Confidential provides a macro-picture on where the stock market is headed, what sectors are hot, what sectors to avoid. Our two most recent and popular calls were telling investors to bail from stocks in 2007 and telling investors to jump back into the stock market in March of 2009. Timely stock market advice that worked well for the Profit Confidential family of readers.
It has been a few months since the launch of the highly anticipated “BlackBerry 10” (BB10) operating system and products by Research In Motion Limited (NASDAQ/BBRY). I have tried the new “BlackBerry Z10” smartphone, and my early thoughts are that it looks good and is faster than the company’s previous phones. But based on the early sales returns, I don’t think Research In Motion (RIM) will be the one to take down Apple Inc. (NASDAQ/AAPL), and it definitely won’t take a run at Google Inc. (NASDAQ/GOOG) and its “Android” operating system, which is the most-used mobile device operating system worldwide. And Korean-based Samsung, with its “Galaxy” line, has become the major reason why Android is doing so well.
For RIM, the race is not to number one, but to try to grab third place and then move upward from there toward Apple, whose “iOS” system is number two, based on my stock analysis. Given the massive size and potential of the global smartphone and tablet market, there is a lot of business to be won, according to my stock analysis. Being in third place wouldn’t be that bad for RIM. Of course, Microsoft Corporation (NASDAQ/MSFT), with its “Windows 8,” also wants a piece of the mobile action.
The market continues to hype up BB10. The shares of RIM surged 185% to a 52-week high of $18.32 on January 24 following the launch of BB10; but the shares have traded lower since on concerns regarding sales of the BlackBerry Z10 phone. With AT&T Inc. (NYSE/T) beginning to sell the Z10 last Friday, it will be interesting to see the response in the key U.S. market, which is still dominated by Android and Apple.
RIM’s stock chart below shows the upward move in the stock and the current stalling. But notice the relative comparison to the downward price performance of Apple indicated by the purple line in the chart below.
Chart courtesy of www.StockCharts.com
According to my … Read More
Mark Mihal got the surprise of a lifetime when he fell into a sinkhole on the 14th hole of a golf course in southern Illinois. His buddies couldn’t find the right ladder, but they got him out okay using a rope. He fell 18 feet. (Source: Suhr, J., “Mo. Golfer survives fall into III. course sinkhole,” Associated Press, March 13, 2013.) That’s one heck of a divot, and not quite the hole-in-one he was hoping for.
Mihal’s description could be considered famous last words for this stock market: “It didn’t look unstable, then I was gone.” (Source: Ibid.) It’s pretty hard to believe the stock market’s gains, although a paper gain is better than nothing. The run-up is a momentum play from institutional investors before the real news hits. “Buy on rumor, sell on news,” goes the old adage.
It is true that bull markets typically start with a bang. Sentiment changes on a dime, and institutional investors start buying. The Dow Jones Transportation Average experienced a powerful stock market breakout in December. A typical bull market indicator? Absolutely, but highly suspect.
Alaska Air Group, Inc. (NYSE/ALK) has been bid 25 points by institutional investors since last October, which is pretty spectacular. Fourth-quarter earnings matched Wall Street expectations, but the numbers weren’t that great. Alaska Air’s stock chart is featured below:
Chart courtesy of www.StockCharts.com
The stock market’s gains since last December aren’t about asset rotation from bonds to the stock market. They’re more about pent-up demand from institutional investors who have nowhere left to go. The bond trade is over, the commodity price cycle is on a break, and currencies are out. The only other asset class is real estate (The Blackstone Group L.P. [NYSE/BX] is buying rental real estate in Florida like crazy).
There’s been remarkable consistency in the stock market’s u… Read More
One piece of stock market advice for you at this time—be careful.
Success in stock picking is trading in the right direction, while also making sure you have a defensive strategy should the trade turn against you, and using puts as a hedge.
I see some danger on the S&P 500 chart.
In January, I noted the S&P 500 could test 1,400 this year, writing that how much the index rises will be dependent on the global and U.S. economies. (See “My Market View: A Risky Start to 2012.”)
The S&P 500 is hovering at 1,335 and will need to advance another 4.9% to hit 1,400. Of course, the threat of global and domestic slowing could impede the upward move.
The S&P 500 could fall to 1,180 by the year-end, according to research by the Financial Forecast Center. A break at 1,300 is predicted by the end of August and 1,200 by the end of September.
Following the break at 1,400 in March, on two subsequent attempts at 1,400 in late April and early May, the S&P 500 retrenched and failed to hold.
Since June, the S&P 500 showed three successive higher peaks at 1,363, 1,374, and 1,380. Yet unless we see support at around the 50-day moving average (MA) of 1,332 and 200-day MA of 1,315, the index may falter and head lower towards a pivot point at 1,306.
The moving average convergence divergence (MACD) indicator, an indicator I like to look at, also appears set to be flashing a sell signal; but on the three previous occasions, it managed to hold. The fear is of the S&P 500 MACD possibly turning down. In May, when the MACD turned bearish, the index corrected from 1,415 to 1,291, a decline of 8.8%. So be very careful now, and perhaps wait and buy on a possible pending correction.
My stock analysis is also partly based on the light trading volume during the upward streak. Failure to see high volume indicates an absence of mass market participation.
Unless there is fresh data that support additional gains, stocks c… Read More
For the most part, good timing results in the majority of your investment returns, whether you’re investing in the broader stock market or in a specific market sector. The problem, of course, is that nobody can predict the future and trying to time the stock market is extremely difficult. (See The Best Stock Market Advice I Know: Get Ahead of the Business Cycle.)
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